What happens if You Sell Your Car without Checking the PPSR - Coastal Motor Advisory

Helps to understand what happens if You Sell Your Car without Checking the PPSR (Personal Property Security Register)

Sell Your Car without Checking the PPSR – This means that if you look at selling a car in Australia, you want to ensure that everything is as legal as possible. Many sellers concentrate on setting the right price, locating a buyer, and paperwork, but miss a critical step: The PPSR check. And therefore if a PPSR check is not done, the buyer and the seller can face enormous problems which will result to legal and or financial mishaps in future or lead to further litigation. What happens if you sell car without checking PPSR and why is checking PPSR so critical when selling your car are answered in this post on our blog.

What is the PPSR?
The Personal Property Securities Register (PPSR) is the national online register of whether or not personal property – including cars – are being used as security for a loan, or whether there are any other interests in the property. What it does is pretty much check to see if a sale is free and clear and the car is not owed to anyone else.

Financing for cars in Australia is widely available and during the period of loan the car is property of the provider of the loan. The Car only becomes yours once the lender/funder has been repaid in full. This kind of debt will survive when a car is sold and can pass from one owner to the next. The PPSR’s job is to check that the car is encumbered free.

The PPSR Risk
That implies that you are actually increasing your danger, if you are the seller or the purchaser of the car, in the event that you aren’t checking the PPS by selling a car. Here are some key consequences of skipping this important step:

1. Consequences of Legal Action, by the Buyer.
   When you sell a car with a security interest registered on the PPSR the new purchaser should be aware that they could obtain information as to whether finance is outstanding on the car. What this also means is that the finance company still has an interest in the car and will attempt to ‘repossess’ the car even when the buyer has bought the car. In this case, you will be in the hands of the buyer for legal issues because you sold a car which still has finance balance.
2. If, however, the Buyer fails to pay the whole purchase price for the goods
   If the buyer found the existence of outstanding finance after its discovery he can either go back on the deal or bargain for a reduction in set price to cover himself for the risk. At the same time, it can make the selling process more complicated too, and reduce what sellers get for their car.

But in some circumstances, a buyer may contract to buy if they have the capacity to extinguish the remaining finance company loan, and so doing a PPSR check as you start the process will avoid much hassle.

3. Repossession of the Car
   If the balance of a car’s finance is not paid before the car is sold, the lender’s right to reclaim a car is again restored. If a person repossess a car, even if he or she have purchased it and did not know of a debt that exists, this person could still lose the car. This could get you in bad position as the seller, and you (as the buyer) could end up losing capital.
4. Damage to Your Reputation
   If you go legal, then you put your reputation on the line because if you go and sell a car with encumbrance and you never tell them, they’re gonna pursue you legally. Referrals are the name of the private sales game, and once you get a bad report on any sale you’ve done in the past, forget the outlook on any other vehicles.

There is a reason why Sellers need to look into PPSR.

Checking the PPSR is simple and straightforward and cheap and could save you future hassle. Because the seller is bound to sell the car to the new owner with clear title. It is the seller’s responsibility to sell the car free from encumbrances (debt free). A recent PPSR check on a car ensures that a car presently has no money owed to it, is not stolen, the car has not been a write-off, the car does not have history/risk factors associated with any financial encumbered.

All you need to do is stick the car’s VIN on a website and it costs just a few dollars. Once that is done, you will receive a certificate which will give the potential car buyer courage to know that the car has been checked financially.

You can learn how to do a PPSR check here.

Final Thoughts – Sell Your Car without Checking the PPSR

Sale of a car without checking on the PPSR is disastrous in that it can lead to legal suits brought against you, confiscation of the car and an adverse reputation. Therefore, a PPSR search only takes a few minutes so you can save time and spend it on other things besides the sale of a vehicle, and you will not have any financial or legal problems regarding the sale later on, when you go to sell your next vehicle.

However, if you are toying with the idea of disposing your vehicle in Australia and you therefore won’t do a PPSR check, then you must know the risks behind this. Before you sell the vehicle ensure that the vehicle does not have any encumbrances to make you and the buyer safe.